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Monday, 7 January 2013

India Dassault deal heading for bumpy ride?

India has snubbed French firm Dassault Aviation, the winner of its ` 1 lakh-crore combat planes deal, over the plea to let it decide on the Indian partner’s work share in the contract.

The Ministry of Defence (MoD) has not only rejected Dassault’s demand to decide on the quantum of work of the government-owned Hindustan Aeronautics Limited (HAL) in the Medium Multi Role Combat Aircraft (MMRCA) contract, but also waved the tender document at the French firm to make known that it did not provide the winning foreign firm such powers. The tender, also called the Request for Proposals or RfP in Defence parlance, had clearly laid down the parametres under which the contract for the 126 aircraft would be awarded to the winning firm.New Delhi has now told Dassault, in response to its earlier demand, that the RfP would be strictly followed in the deal. “The Dassault request has been rejected and they have been told to refer to the tender documents where it has been clearly mentioned about the domestic systems integrator,” MoD sources said here on Thursday.India chose in January 2011, Dassault’s Rafale planes as the winner of the MMRCA tender, described as the ‘mother of all deals’ by the Indian media.However, the contract is yet to be signed with both sides still negotiating the deal. Indications are that the contract may be inked only by the second half of 2013 now that India is facing funds crunch, resulting in Defence budget cuts in the 2012-13 fiscal.Late last year, Dassault wrote to the MoD seeking the right to decide the quantum of work that HAL would do as the Indian primary partner for the plane’s systems integration.Rafale was preferred over European consortium EADS Cassidian’s Eurofighter Typhoon, which was the other plane that was down-selected for the MMRCA tender in April 2011.The other competitors rejected by India are American firms Boeing’s F/A-18 and Lockheed Martin’s F-16, Russian United Aircraft Corporation’s MiG-35 and Swedish Saab’s Gripen.After bagging the MMRCA deal, Dassault signed an MOU with Reliance Industries Limited to jointly work in the Indian security and defence sectors.The French firm also launched a wholly-owned subsidiary, Dassault Aircraft Services India Private Limited (DASIPL), to execute the MMRCA project.